The Federal Government Should Reveal Figures Of Investment In The Services Sector To Seek Convergence Of The Manufacturing, Services And Public Sector If Malaysia Is To Succeed In Transforming Into A High-Income Economy.(en/cn)

Press Statement By Penang Chief Minister Lim Guan Eng In Komtar, George Town On 23.10.2013.

Malaysia must succeed in developing the services sector to escape the middle-income trap and become a developed economy with a per-capita income of USD 15,000 by 2020. What we need to do is to ensure a partnership of equals between the 3 sectors of manufacturing, services and government.

In other words, a partnership with capital, labour, innovators with the government as an enabler. The government plays an important role as an enabler between manufacturing and services sector. Government must also invest and innovate.

The government must invest in infrastructure, people, incentives and subsidies. The government must also innovate with new policies that stresses on:-
• liberalisation of the existing rules and to reduce red-tape,
• divestment from non-core businesses or accept that the “business of government is to stay out of business”,
• permit free and fair competition; and
• encourage human capital formation where human talent is now the new oil of the global economy.

Malaysia and Penang’s economy has shifted from extraction in the 1960s to industrialisation, from the export of raw commodities to manufacturing. From a factor-driven economy by relying on basic commodities before our present position of being efficiency-driven by relying on manufacturing. To go to the next stage of high-income economy, Penang needs to be not only efficiency-driven but also innovation-driven in manufacturing, services and even the public sector.

Penang’s future prosperity depends on whether our manufacturing, services and government sector can be both efficiency-driven and innovation-driven. For this reason, the Federal Government should reveal figures of investment in the services sector to seek convergence of the manufacturing, services and public sector if Malaysia is to succeed in transforming into a high-income economy.

Even though Penang was the top recipient of Foreign Direct Investment(FDI) in Malaysia with RM19.7 billion from 2010 to August 2013, followed Johor with RM 16.7 billion, there is a need to focus on the services sector.

According to a written reply from the Prime Minister Datuk Seri Najib Tun Razak to DAP Kuching MP Chong Chien Jen,